8 Exit Options To Be Considered

  1. Keeping Ownership "In the Family"
    • You have a great emotional stake in your business' future, which is why you may want to consider keeping the business in the hands of someone with the same emotional attachment. Designating the appropriate family member is key to your business' livelihood. Making sure the family member takes part in the exit planning process will help ensure a smooth transition.
  2. Sell to Other Shareholders
    • When you are ready to leave but other co-owners are not, a buyout agreement could be necessary to determine how shares in a business can be bought and sold, and by whom.
  3. Sell to Management (MBO or "Management Buyout")
    • If a management team takes over your business, they will likely have a commitment to making it work. Additionally, they already know the business from top to bottom, thus avoiding an adjustment period with a possible dip which might occur if an outside person takes over. With a MBO, your business is not "up-for-sale" for a lengthy period, therefor avoiding a drop in value and lingering uncertainty for the staff.
  4. Employee Stock Option Plan
    • An ESOP is one of the best ways to create liquidity and maximize the tax advantages available to you while staying in control.
  5. Sell to a Third Party
    • Gain the input required when considering selling to a third party, and ensure your infrastrucure is adequate enough to support your business once you leave. Take geography, product base, facilities and competitive interest into account, and learn more about what a prospective buyer may look for.
  6. Refinance or Recapitalize
    • Restructuring a company's debt and equity mixture to provide liquidity for the stockholders.
  7. Go Public
    • Issuing an IPO can give yourself and your investors a way to retrieve some of the money you've put in. The size of your business is key in determining if going public is the right answer.
  8. Liquidate
    • While liquidation may be considered easy and negotiation free, assets often must be used to repay creditors, and the legacy of your business remains only a memory. Your reputation could be deemed as destroyed or ruined.